Topic: How To Invest

The Successful Investor Hotline – Friday, October 7, 2016

Article Excerpt

BANK OF MONTREAL, $83.95, Toronto symbol BMO, is Canada’s fourth-largest bank by assets. Regulators require each bank to maintain sufficient capital ratios; that’s a measure of its capital (including cash, securities and loans) as a percentage of its overall assets. Capital ratio requirements are meant to help those lenders absorb future loan losses. This week, Bank of Montreal had to restate its capital ratios for the past three quarters after it recalculated the value of certain assets. As a result, its main capital ratio worsened from 10.5% of its assets to 10.0% in the quarter ended July 31, 2016. That’s still well above the 8.0% minimum level. The change could slow the pace of share buybacks and dividend increases; the current annual rate of $3.44 a share yields 4.1%. However, the change will have little impact on the bank’s long-term prospects. OUR RECOMMENDATION: Bank of Montreal is a buy. Bank of Montreal recent coverage October 2016 issue Hotline for August 26, 2016 HOME CAPITAL GROUP INC., $24.65, Toronto…